The White House said security arrangements in Lima had been checked since the attack, which is being seen as an attempt to disrupt - or force the cancellation of - the first official visit to Peru by a US head of state.

No group has admitted carrying out the attack.

Peruvian authorities, who had already been tightening security ahead of the Bush visit, say there will now be further measures, including the closure of Lima's historic centre and extra police patrols.

Undeterred

Mr Bush told reporters in the Oval Office that "we might have an idea" who set off the bomb, adding: "They've been around before."

He did not name any groups.

Defiant: President Bush

During the 1980s and 1990s, 30,000 people were killed when the Shining Path and Tupac Amaru Revolutionary Movement guerrilla groups waged war on the state.

Mr Bush said he was not concerned about security on his trip, which also includes Mexico and El Salvador.

"No two-bit terrorists are going to prevent me from doing what we need to do and that is promote our friendship in the hemisphere," he said.

Guard killed

The embassy, in a residential area of the capital, was left undamaged by the blast from a powerful car bomb which detonated at about 2245 local time (0345 GMT Thursday). A second device failed to explode.

But the US state department said a Peruvian embassy guard was among the dead.

It is said to be Peru's worst car bombing in nearly 10 years

Two police officers stationed at the embassy were among 30 people injured in the attack outside a Banco de Credito de Lima branch office at the El Polo shopping centre, in the eastern Lima neighbourhood of La Molina.

The blast - four blocks from the embassy - left a large crater in the ground, and the street littered with wrecked cars.

First television images from the scene showed the street littered with glass, brick and concrete.

Radio reports said at least four bodies could be seen in the rubble, including a teenager wearing roller skates.

We will not yield even a centimetre to terrorism

Peruvian President Alejandro Toledo

One of those killed was a police officer who had been inspecting one of the suspicious vehicles, Interior Minister Fernando Rospigliosi said.

President Toledo said he would not permit democracy to be undermined by terrorist attacks.

He is cutting short a visit to Mexico, where he is attending the UN international development summit, to return home.

Violent past

The BBC correspondent in Lima says that, for many Peruvians, the attacks are a frightening reminder of what they call the terrorism years of the 1980s and early 1990s, when Shining Path militants frequently exploded bombs and other devices in the capital.

The last car bomb explosion in Lima was in May 1997 and was planted by the group.

In a separate incident on Wednesday, a small bomb exploded just before dawn outside an office of a telephone company in Lima, police said.

No-one was reported injured.

On Tuesday night, a package containing a grenade was thrown from a car on to a street in north-eastern Lima. The grenade exploded but no-one was injured, police said.